BlackRock Multi Sector I... News - BIT

The Securities and Exchange Commission on Friday filed fraud charges against a Hollywood movie executive for stealing money from a BlackRock Inc. fund.

The regulator alleges that William Sadleir diverted some $25 million from the BlackRock Multi-Sector Income Trust, a roughly $600 million fund that financed his film distribution holding company, Aviron Group. The SEC said Mr. Sadleir siphoned the money into a fake company he created.

He also used some of the money to buy a Tesla car and a Beverly Hills mansion, and to remodel his home, according to the SEC's lawsuit.

Some of Mr. Sadleir's actions were reported in a Wall Street Journal column in February. A BlackRock fund had invested roughly 10% of its assets in Mr. Sadleir's ventures.

Mr. Sadleir, according to the SEC, set up a company with a name resembling another actual media investment company and created a fictitious individual working for that company as part of the scheme. In 2016 and 2017, he billed fake invoices requesting that Aviron make payments to the sham company, the SEC said.

In 2019, he forged signatures to release claims on Aviron assets so he could resell them, the SEC said. That July, he created fake agreements between the BlackRock fund and Aviron in which he copied the signatures of the fund's then-portfolio manager Randy Robertson. Mr. Sadleir's movie company cast Mr. Robertson's daughter in one of its films. Early this year, BlackRock fired the manager, Mr. Robertson, after a weekslong internal investigation.

In a February interview with the Journal, Mr. Sadleir said he regretted copying the fund manager's signatures.

"I should not have done it," he said. "It was bad judgment on my part. I know better."

Mr. Sadleir lost control of various Aviron subsidiaries late last year, according to the SEC. The agency is asking the court to compel Mr. Sadleir to return gains received through fraudulent dealings and pay civil penalties. The SEC said its investigation is continuing.

The U.S. government is accusing him of two counts of wire fraud and one count of aggravated identity theft. If convicted, Mr. Sadleir faces up to 20 years for each count of wire fraud and two years in prison for the other charge, according to the department.

Aviron has released films such as "A Private War" and "Kidnap," starring Halle Berry. BlackRock oversees some $6.5 trillion in assets under management.

"BlackRock is pleased that the government has moved swiftly to investigate and bring Mr. Sadleir to justice," said a firm spokesman. The firm in February said it was working to recover value for investors and had taken steps to enhance the level of oversight and due diligence on such transactions.